You may have heard of actuaries, but you'll be forgiven if you don't quite understand who they are or what they do. It's one of those careers that's hard for many people to define. James van Iwaarden, a consulting actuary in Minneapolis, Minn., sums it up this way: "We are finance mathematicians."
That description might conjure up images of men in suits and ties punching numbers on their calculators and filling out spreadsheets all day. However, van Iwaarden and other actuaries say their job can involve just as much problem solving and communicating as it does number crunching.
Perhaps even more surprising for those not familiar with the job, actuaries are a top career choice for women who want a good income, secure employment, and flexible job opportunities.
One of the best jobs for women in 2014
In recent years, actuaries have made the cut on many job rankings as one of the best careers in the nation, with a 2012 report from CNN Money going so far as to say actuarial graduates have zero percent unemployment.
While those previous rankings discussed the career in general, CareerCast designated actuary as one of the top jobs for women in 2014. The career services website used data from the Bureau of Labor Statistics to determine which occupations are on the rise and then considered factors such as stress level, number of females in the field, and physical demands to whittle down the list to the 12 best careers for women.
Connie Chang, who worked as an actuary for insurer WellPoint until recently, says CareerCast is absolutely correct. "I definitely think so," she says when asked if actuarial work is a top job for women. "I worked from home for the past two years."
Although Chang doesn't have children, she says she does have friends in the field who are mothers and who benefit from having jobs that are both convenient and flexible. "It's a very stable and secure job," she adds, "and great if you like number crunching and analytics."
Plus, actuaries are expected to be in high demand in coming years. The BLS projects employment in the field to grow 26 percent from 2012 to 2022.
What actuaries do
Math is a central component of actuarial jobs.
"On a day-to-day basis, actuaries use mathematics to solve business problems," explains Chang. "We use Excel extensively and are constantly looking at numbers and coming up with statistics."
For example, actuaries help insurance companies determine their level of risk in extending certain policies. Their work helps determine whether an insurance policy should be issued and how much should be charged in premiums.
While actuaries are typically employed in the insurance and finance sectors, their jobs may differ depending on their specialty. "What we do on a daily basis depends heavily on practice area," says van Iwaarden.
He explains there are four main categories of actuaries:
- Casualty actuaries (working with homeowner, auto and business insurance)
- Life insurance actuaries
- Health actuaries
- Retirement actuaries
Chang adds that enterprise risk management is a fifth, and emerging, specialty in the field.
Additionally, van Iwaarden notes individuals can be either internal actuaries or consulting actuaries. Internal actuaries work in-house and are typically employed by insurance companies to help keep them solvent. Consulting actuaries specialize in a particular area -- van Iwaarden's is retirement -- and are generally self-employed or work for firms providing services on a contractual basis.
Getting the right education
Although degrees in actuarial science are available, individuals don't need a specialized degree to enter the field.
"I studied math in college thinking I might want to teach it," says van Iwaarden, "and then realized I wanted to use my math in a business concept."
Actuaries may have degrees in mathematics, statistics or business. While a specific degree isn't required, individuals going in the field will want to take coursework in economics, statistics and finance to prepare them for the long series of exams required to become a fully credentialed actuary.
It's an exam process both van Iwaarden and Chang agree can be long and cumbersome, although the rewards are rich for those who persevere to the end. The BLS found the median income for actuaries in 2012 was $93,680. However, the Society of Actuaries and the Casualty Actuarial Society say experienced fellows -- the highest designation an actuary can receive -- could earn $150,000 to $250,000 per year or even more.
The actual number of exams to be taken depends on the field in which an individual wants to work, and exams are administered through the SOA and CAS. Fortunately, actuaries can begin work before completing all the exams, and many employers even accommodate study time during the workday.
"A lot of companies, especially insurers, will give you extra time to study for these exams," says Chang.
Advice for those entering the field
For those contemplating a career as an actuary, both van Iwaarden and Chang say getting a head start on the exams is critical.
"You want to pass at least one actuarial exam in college," says van Iwaarden. "Having passed one or two exams signals to employers ability and interest."
Chang also recommends students explore the different fields of actuarial work to determine the best fit for them. Both Chang and van Iwaarden say the job requires more than simply good math skills. As actuaries progress in their career, they move from qualitative work to tasks that involve communication, critical thinking and problem solving skills.
"A successful actuary is one who can not only do the work but also relate it to lay people," says van Iwaarden.
As a bonus, Chang found her actuarial experience translated well to the business world. When she decided to start her own business, Tasty Time, she learned her analytical skills came in handy.
Chang and van Iwaardan may have traveled different career paths, but both agree joining the actuarial field was a smart move. It's no wonder so many career rankings place it as a top job for men and women alike.
Interview with James van Iwaarden, www.vaniwararden.com
Interview with Connie Chang, www.tastytime.com
"4 degrees with 0% unemployment," CNN Money, May 23, 2012, Annalyn Censky, http://money.cnn.com/galleries/2012/news/economy/1205/gallery.high-demand-jobs/index.html?section=money_topstories
"Actuaries," Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, http://www.bls.gov/ooh/math/actuaries.htm
Be an Actuary, Society of Actuaries and Casualty Actuarial Society, www.beanactuary.org
Best Jobs for Women in 2014, CareerCast, http://www.careercast.com/jobs-rated/best-jobs-women-2014